Saturday, February 07, 2009

atastrophe," Present Øfascist's latest propaganda buzzword, is what Dear Leader™ is promising everyone if Congress doesn't rubberstamp his dangerously reckless move to malevolently mortgage our children and grandchildren's futures with his fiscally irresponsible, public debt-exploding, government Spendulus Porkage®.

After all, Hitler did it, so it must be a Good Thing™.

R. J. Overy, War and economy in the Third Reich (Oxford University Press, 1994), pp. 51-57 (footnotes omitted; links and emphases added).

The government response to unemployment can be divided between direct and indirect measures. The most important direct measures were the various work-creation schemes introduced during 1932 and 1933.

Just as Adolf Hitler was literally taking Germany's highest office.

Since the schemes provoked much academic discussion at the time and made much useful propaganda for the Battle for Work, they are worth looking at in some detail. The main object of the work-creation programmes was to provide temporary employment for the long-term unemployed who were no longer covered by insurance and to promote schemes that would act as a stimulus to private economic activity. The idea of an 'initial spark' (Initialzündung)... was taken up during 1932 and 1933 as the justification for embarking on state-financed programmes which might otherwise have alarmed orthodox financial circles....

Former Half-Term Junior Senator Øfear-monger's Stimülüs does sound better in the original German.

[D]uring 1932 the government supplemented direct relief work with federal work programmes funded directly by the state, primarily through short-term bills which were to be repaid out of future tax revenues when the economy recovered.... The most important of all was the Reinhardt-Programm authorized by the Law for Reducing Unemployment on 1 June 1933, which made... [a billion Reichsmarks] immediately available for public works. The schemes were aimed at public services and construction, waterways, road-building, bridge repair, etc....

The employment effects of these direct schemes are difficult to ascertain precisely because there was considerable overlap between work-creation, labour service, and additional work-creation schemes..., all of which used the same sort of suppliers and drew on a common pool of unskilled and semi-skilled labour....

The work-creation employment contributed an estimated 20 per cent to the increase of 2.8 million in employment in 1933-4, though most of it was concentrated in the winter and spring of 1933-4. Like the labour service programme, work-creation took time to get going. Initially there was some distrust of the schemes in business circles, based on a fear of their long-term fiscal effects

In other words, unprecedentedly huge federal budget deficits and public debt.

and on the evidence that... [they] had no real impact on the rising unemployment levels.... There was also a considerable gap between the sums authorized for expenditure and the actual sums taken up.

Even by December 1933 only 77 per cent of... [an earlier "stimulus" program enacted in September 1932] had been taken up, and 55 per cent of [the "emergency" program enacted in December and January 1932/3]. The Reinhardt-Programm launched in mid-1933 had allocated only 47 per cent of its funds by December but had only paid out RM 38m., or 4 per cent. Almost 50 per cent of the payments for work-creation were made during 1934 so that there was something like a nine-month to a year lag between establishing a programme and turning it into actual projects employing labour.... In addition, most of the projects were fairly short term, which may well explain the slowing down in the decline in unemployment during the summer of 1934 and early 1935 as the projects petered out and men looked for long-term employment again. And although they were intended to be labour-intensive, the balance swung towards material costs away from wages in 1933....

Work-creation was only one weapon in the attack on unemployment after 1933 and was effective only to the extent that there was substantial improvement in the general conditions governing business activity in Germany.... Part of this revival in business confidence can be attributed to the 'stabilization' of politics promised by the Nazis after January 1933,

That is, forcible and often brutal elimination of all political opposition and dissent — aka "Change we canbetter believe in — or else."

though it would be wrong to ignore the deep distrust with which many businessmen approached the new government and its economic policies. Part can be attributed to the government propaganda on employment. After January 1933 the government openly promoted work at every opportunity, exhorting businesses to take on extra workers and subsidizing their wage bills, bringing political pressure to bear to get firms to restrict hours of work and overtime; and making noisy propaganda on the importance of re-employment for Germany's political and economic future. During 1933 public opinion was quite prepared to support these initiatives so that there was little political resistance to the employment campaign....

It was in the area of general interventionist economic policies that the government proved most successful.... General policies on trade, finance, and investment helped to sustain and promote the upswing from early 1933 onwards more than the specific policies on work-creation. The credit structure which had ground almost to a standstill in 1931 was stabilized during 1932 and over the following two years credit was generally eased through careful initiatives taken by the government and the [central] Reichsbank in lowering interest rates, consolidating and securing local government debts,

and exercising greater control over the banking system.... In September 1932 a system of tax remission was introduced designed to stimulate the productive sectors of the economy by giving government rebates for taxes paid in 1932/3. The rebates came in the form of tax certificates which could be used to pay off taxes in future years....

The effect of the appointment was as much psychological as anything, for the commission never met, and Schacht continued to regulate the capital market in his position as head the Reichsbank.... Direct and indirect taxation were kept at the high depression levels and it proved necessary to introduce price and wage controls in order to avoid any risk of the recovery petering out on rising costs and inflationary crisis. Profits were also controlled by limiting their distribution and encouraging reinvestment to expand employment. The government also extended controls over foreign trade.... Without this wider range of controls and regulations, higher levels of employment would have been postponed, work-creation or not.

Can you say "change"? No, I thought you couldn't.

It's Politics of Fear™, Political Paybacks®, Special-Interestimulus, and "leaving a mountain of debt for the next generation" as usual.